BlockBeats News, August 21st - Goldman Sachs MarketStrats believes that the U.S. Treasury's expansion of long-term Treasury repurchases does have the ability to temporarily alleviate long-end pressure. Referring to the 1961 Operation Twist and the 2011 maturity extension program, historical policy tools have historically led to a long-end rate decline of about 10-20 basis points; Goldman Sachs believes that this round of repurchases, adjustment of issuance terms, and balance sheet management could also potentially achieve a temporary 20-40 basis point decline in long-term yields.

However, Goldman Sachs remains cautious about the long-term impact. Behind the current rise in long-term rates, the driving force is no longer just technical supply-demand mismatches, but also includes ongoing fiscal deficits, inflation uncertainty, and the rise in equilibrium real interest rates. The report also emphasizes that AI capital expenditures, data center construction, power infrastructure, and reindustrialization are also continuously driving up the overall societal capital demand. While Treasury repurchases can alleviate the duration supply that the market needs to absorb in the short term, it is difficult to change the overarching trends of capital becoming more expensive and the rise in long-term rate equilibrium.